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Chapter 22-The Great Depression Begins 1929-1932

Chapter 22-The Great Depression Begins 1929-1932. Section 1-Causes of the Depression . CHAPTER 22-the great depression begins 1929-1932. Section 1-Causes of the Depression. Click the Speaker button to listen to the audio again. Chapter Objectives. Section 1: Causes of the Depression.

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Chapter 22-The Great Depression Begins 1929-1932

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  1. Chapter 22-The Great Depression Begins 1929-1932 Section 1-Causes of the Depression

  2. CHAPTER 22-the great depression begins 1929-1932 Section 1-Causes of the Depression

  3. Click the Speaker button to listen to the audio again.

  4. Chapter Objectives Section 1: Causes of the Depression • Describe the characteristics of the 1920s stock market.  • Identify the causes of the Great Depression. Click the mouse button or press the Space Bar to display the information.

  5. Why It Matters Prosperity in the United States seemed limitless before the Great Depression struck. Overproduction and agricultural problems contributed to the economic catastrophe. President Hoover looked to voluntary business action and limited government relief as solutions, but these efforts failed. Meanwhile, millions of Americans lost their jobs and life savings. Artists and writers depicted this suffering, and many people turned to lighthearted films to escape their difficult lives.

  6. The Impact Today Events of this period remain important. • Hoover’s model of business-government cooperation is still influential.  • John Steinbeck’s novel The Grapes of Wrathand Grant Wood’s painting American Gothicare permanent artistic legacies. Click the mouse button or press the Space Bar to display the information.

  7. continued on next slide

  8. Click the Speaker button to listen to the audio again.

  9. The Election of 1928 • The 1928 election placed former head of the Food Administration and secretary of commerce, Herbert Hoover, on the Republican ticket against Democratic candidate, Alfred E. Smith, a four-time governor of New York and the first Roman Catholic to be nominated for president.  • The issue of Prohibition played a major role in the campaign.  • Hoover favored a ban on liquor sales.  • Smith opposed the ban. (pages 656–657) Click the mouse button or press the Space Bar to display the information.

  10. The Election of 1928(cont.) • Religious differences between the candidates had a major effect on the campaign.  • The Catholic issue led to a smear campaign against Smith.  • The Republicans took full credit for the prosperity of the 1920s, and Herbert Hoover easily won the 1928 election by a landslide. (pages 656–657) Click the mouse button or press the Space Bar to display the information. Click the mouse button or press the Space Bar to display the information.

  11. The Long Bull Market • The stock marketwas established as a system for buying and selling shares of companies.  • A long period of rising stock prices is known as a bull market. • Prosperous times during the 1920s caused many Americans to invest heavily in the stock market. (pages 657–658) Click the mouse button or press the Space Bar to display the information.

  12. The Long Bull Market(cont.) • As the bull market continued to go up, many investors bought stocks on margin, making a small cash down payment.  • This was considered safe as long as stock prices continued to rise.  • If the stock began to fall, the broker could issue a margin calldemanding that the investor repay the loan immediately. (pages 657–658) Click the mouse button or press the Space Bar to display the information.

  13. The Long Bull Market(cont.) • In the late 1920s, new investors bid prices up without looking at a company’s earnings and profits.  • Speculation occurred when investors bet on the market climbing and sold whatever stock they had in an effort to make a quick profit. (pages 657–658) Click the mouse button or press the Space Bar to display the information.

  14. The Great Crash • By late 1929, a lack of new investors in the stock market caused stock prices to drop and the bull market to end.  • As stockbrokers advised their customers of margin calls, customers responded by placing their stocks up for sale, causing the stock market to plummet further.  • Stock prices fell drastically on October 29, 1929, Black Tuesday, resulting in a $10 to $15 billion loss in value. (pages 658–659) Click the mouse button or press the Space Bar to display the information.

  15. The Great Crash(cont.) • While this did not cause the Great Depression, it did undermine the economy’s ability to hold out against its other weaknesses.  • The stock market crash weakened the nation’s banks.  • Banks lost money on their investments, and speculators defaulted on loans.  • Because the government did not insure bank deposits, customers lost their money if a bank closed. (pages 658–659) Click the mouse button or press the Space Bar to display the information.

  16. The Great Crash(cont.) • Bank runs resulted as many bank customers withdrew their money at the same time, causing the bank to collapse. (pages 658–659)

  17. The Roots of the Great Depression • Efficient machinery led to overproduction, and Americans could not afford to buy all the goods produced.  • The uneven distribution of wealth in the United States added to the country’s economic problems.  • In 1929 the top 5 percent of American households earned 30 percent of the country’s income.  • More than two-thirds of the nation’s families earned less than $2,500 a year. (pages 659–660) Click the mouse button or press the Space Bar to display the information.

  18. The Roots of the Great Depression(cont.) • Low consumption added to the economic problems.  • Worker’s wages did not increase fast enough to keep up with the quick production of goods.  • As sales decreased, workers were laid off, resulting in a chain reaction that further hurt the economy. (pages 659–660) Click the mouse button or press the Space Bar to display the information.

  19. The Roots of the Great Depression(cont.) • Many Americans bought on the installmentplan, making a down payment and paying the rest in monthly installments.  • Paying off installment debts left little money to purchase other goods.  • The Hawley-Smoot Tariffintensified the Depression by raising the tax on imports.  • Americans purchased less from abroad because of the high cost. (pages 659–660) Click the mouse button or press the Space Bar to display the information.

  20. The Roots of the Great Depression(cont.) • In return, foreign countries raised their tariffs on American products, causing fewer to be sold overseas.  • Instead of raising interest rates to stop speculation, the Federal Reserve Board made the mistake of lowering the rates.  • This encouraged banks to make risky loans and misled business owners into thinking the economy was still expanding. (pages 659–660) Click the mouse button or press the Space Bar to display the information.

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